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THE  CANADIAN  GOVERNMENT 


AXD 


THE  CANADIAN  PACIFIC  RAILWAY, 


SUBMITTED    TO   THE    SENATE    COM3IITTEE    ON 
INTERSTATE  COMMERCE 


BY 


JOSEPH   NIMMO,  th^J IS'S^ 


APRIL,  1890. 


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WASHINGTON: 

GOVERNMENT  PRINTING  OFFICE. 

1890. 


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STATEMENT 


IN  REGARD  TO 


THE  CANADIAN  GOVERNMENT 


1 


AND 


THE  CANADIAN  PACIFIC  RAILWAY, 


SUBMITTED    TO   THE    SENATE    COMMITTEE    ON 
INTERSTATE  COMMERCE 


BY 


JOSEPH    NIMMO,   Jr., 


APRIL.  1890. 


^*»*  ^ 


WASHINGTON: 

GOVERNMENT  PRINTING  OFFICE. 

::^  ^        1890. 


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648  TRANSPORTATION   IN^TERESTS    OF 

The  following  statement  from  Mr.  Joseph  Nimmo,  jr.,  was  submitted 
at  the  request  of  the  committee : 

STATEMENT  OF  JOSEPH  NIMMO,  Jr. 

By  way  of  introduction  to  this  large  and  complex  subject,  I  would 
invite  the  attention  of  the  committee  to  the  important  fact  that  the 
Canadian  Government  differs  radically  from  the  Government  of  the 
United  States  with  respect  to  its  relation  to  the  subject  of  transporta- 
tion and  commerce.  For  the  last  fifty  years  the  Canadian  Government 
has  been  closely  allied  to  the  transportation  interests  of  Canada,  and 
that  Government  is  to-day  not  only  a  large  owner  of  canals  and  rail- 
roads, but  it  also  exercises  a  control  over  the  operations  of  its  transpor- 
tation lines,  with  respect  not  only  to  commercial  but  to  political  objects. 

On  the  other  hand,  the  Government  of  the  United  States,  as  you  are 
well  aware,  has  confined  itself  almost  entirely  to  the  regulation  of  rail- 
roads, and  has  never  become  an  owner  or  practical  manager  of  the  sub- 
ject of  transportation,  leaving  those  matters  to  the  interaction  of  com- 
mercial forces.  A  proper  appreciation  of  this  distinction,  is,  in  my 
opinion,  vital  to  a  correct  understanding  of  the  whole  subject  of  the 
relations  of  Canada  to  the  United  States.  And  now  I  will  proceed  to 
state  to  you  in  a  general  way  the  interests  which  the  Canadian  Govern- 
ment has  in  transportation. 

CANADA'S  INTEREST  IN  TRANSPORTATION. 

About  the  time  when  the  State  of  New  York  embarked  in  the  work 
of  constructing  the  Erie  Canal,  the  Dominion  of  Canada  began  the 
construction  of  its  system  of  canals  connecting  Lake  Erie  with  ocean 
navigation  at  the  port  of  Montreal.  This  was  accomplished  by  the 
construction  of  the  Welland  Canal,  which  overcomes  the  fall  between 
Lake  Erie  and  Lake  Ontario;  and  the  system  of  St.  Lawrence  River 
canals  which  overcomes  the  rapids  in  the  St.  Lawrence  River  between 
Kingston  and  Montreal. 

I  will  also  remark  here  that  from  the  beginning  the  Dominion  of 
Canada  and  Great  Britain  have  had  direct  interest  in  transportation 
lines  with  reference  to  military  objects.  While  the  systems  of  canal» 
of  which  I  have  just  spoken  were  being  constructed,  an  interior  line  of 
navigation,  known  as  the  Ottawa  and  Rideau  canal  system,  wag  con- 
structed between  Montreal  and  Kingston,  mainly  for  military  purposes, 
as  the  St.  Lawrence  Canal  was  too  much  exposed  to  an  attack  from  the 
United  States. 

The  canal  system  of  Canada  cost  a  little  over  $52,000,000,  and  it  i» 
still  owned  and  operated  by  the  Dominion  Government.  As  we  fol- 
low the  history  of  Canada  we  shall  discover  the  fact  that  her  Govern- 
ment is  as  much  a  commercial  and  transportation  corporationas  a  politi- 
cal corporation. 

That  is  an  important  fact  and  one  which  muet  be  kept  in  mind  all 
the  way  through.  In  my  opinion  it  is  the  most  important  characteristic 
of  the  Dominion  Government,  in  so  far  as  relates  to  the  question  of  the 
relations  of  Canada  to  the  United  States. 

CANADA'S  INTEREST  IN  RAILROADS.  '..r':;-*' 

I  will  next  mention  to  you  the  interests  which  Canada  has  in  railroads. 

Up  to  the  year  1867  the  several  British  North  American  provinces 

were  entirely  independent  of  each  other.    The  political    bond  be- 


THE    UNITED    STATES    AND    CANADA.  649 

tween  tliem  was  their  common  relations  to  the  British  Government. 
During  the  civil  war  in  this  country  the  question  of  the  political 
union  of  these  i)rovinces  and  the  project  of  connecting  them  by  govern-  / 
menl  railroads  was  agitated  both  in  Canada  and  in  Great  Britain,  and  . 
in  80  far  as  I  have  been  able  to  comprehend  the  subject,  it  has  seemed  to 
me  to  be  part  aud  parcel  of  the  general  si)irit  of  opposition  which  at 
that  critical  period  was  manifested  by  Great  Britain  and  Canada  toward  • 

«the  maintenance  of  the  Union  of  the  States. 

'  By  an  act  of  the  British  Parliament  of  March  29, 1867,  known  as  the 
British  North  American  act,  the  several  colonies,  excepting  Newfound- 
land aud  Prince  Edward  Island,  became  united  as  the  Dominion  of 
Canada.  One  of  the  conditions  under  which  this  union  was  effected 
was  that  a  railroad  should  be  built  by  the  Dominion  Government  con- 
necting the  provinces  of  Ontario,  Quebec,  Nova  Scotia,  and  New  Bruns- 
wick. This  road  was  accordingly  built  by  the  government.  Its  main 
line  extends  from  Point  Levis,  opi)osite  Quebec,  to  Halifax.  It  pursues 
quite  a  circuitous  route.  The  cost  of  the  intercolonial  railway  system 
was  about  $46,000,000.  That  system  is  still  owned  and  operated  by  the 
Dominion  Government.    Commercially  it  is  a  non-paying  enterprise. 

According  to  the  report  for  the  latest  year  the  cost  of  operating  the 
system  was  $232,100  in  excess  of  the  receipts. 

THE  CANADIAN  PACIFIC  RAILWAY. 

But  the  most  important  railroad  enterprise  in  which  the  Dominion 
Government  is  interested  is  the  Canadian  Pacific.  The  scheme  of  con- 
structing a  Canadian  railroad  across  the  continent  is  said  to  have  been 
first  suggested  thirty  or  forty  years  ago,  but  it  did  not  assume  a  practi- 
cal shape  until  during  our  civil  war.  The  definite  plans  for  construction  . 
were  finally  determined  upon  about  the  year  1867,  the  year  in  which  the 
Dominion  Government  was  inaugurated.  The  date  of  the  inaugura- 
tion of  that  Government  was  July  1,  1867.  That  day  is  celebrated 
every  year  in  Canada  as  *'  Dominion  Day.'^ 

The  construction  of  the  Canadian  Pacific  Railroad  is  so  closely  identi- 
fied with  the  present  administration  of  government  affairs  in  Canada 
that  I  will  turn  aside  here  to  make  a  general  statement  to  the  commit- 
tee in  regard  to  that  government. 

CONSTRUCTION  OF  THE  CANADIAN  PACIFIC  RAILWAY.  •' 

Sir  John  A.  Macdonald,  the  present  Premier  of  Canada,  was  the  po- 
litical leader  of  the  plan  of  confederation,  which  embraced  not  only  the 
political  union  of  the  provinces,  but  their  commercial  union,  by  means 
of  railroad  construction.  As  before  remarked,  one  of  the  fundamental 
principles  of  this  scheme  was  the  construction  of  the  Intercolonial 
Railway  The  other  was  the  construction  of  the  Canadian  Pacific 
Railway.  The  Macdonald  party  saw  that  the  natural  affinities  of  trade 
of  all  the  colonies  were  with  the  United  States.  This  they  resolved  to 
overcome  by  means  of  railway  construction,  and  thus  to  hold  the  prov- 
inces in  their  allegiance  to  Great  Britain. 

Sir  John  Macdonald's  party  assumed  control  of  the  affairs  of  the  Do- 
minion at  the  time  of  the  inauguration  of  that  government,  July  1, 1867. 
The  Canadian  Pacific  Railway  was  soon  afterwards  begun  as  a  govern- 
ment road,  but  in  the  course  of  a  few  years  difficulties  arose,  and  in 
consequence  of  a  public  scandal  concerning  the  financial  management 
of  the  enterprise,  Sir  John  Macdonald  was  driven  from  power  in  1873, 


•-»■■,  '^r;*' 


650  TRANSPORTATION    .NTERESTS  OF  ' 

But  iu  1878  he  triumphantly  returned  to  power  upon  the  original  issue 
of  constructing  the  Canadian  Pacific  Railway,  and  his  pavty  has  re- 
mained in  power  ever  since. 

In  consequence  of  public  prejudice  which  had  arisen  in  connection 
with  the  attempt  of  the  government  to  construct  the  road,  its  construc- 
tion was  assigned  to  a  private  corporation,  the  Canadian  Pacific  llailway 
Company,  which  corporation  in  all  things  touching  questions  of  commer- 
cial and  political  policy  has  been  and  still  is  the  alter  ego  of  the  Dominion 
Government.  All  that  had  been  done  in  the  way  of  construction  of 
the  road  was  at  once  turned  over  to  the  Canadian  Pacific  Railway  Com- 
pany as  a  gift.  The  portions  of  the  completed  line,  which  had  cost 
$35,000,000,  were  thus  donated  to  the  Canadian  Pacific. 

The  total  value  of  aids  of  various  sorts  extended  to  the  Canadian 
Pacific  by  the  Dominion  Government  is  stated  in  the  following  table  : 

Revised  estimate  of  gifts  from  the  Dominion  Government  to  the  Canadian  Pacific  Bailicay 
Company,  and  securities  tchich  that  companij  has  been  enabled  to  float  {stock  and  bonds) 
as  the  result  of  the  Dominion  guaranty  and  the  land  grant  o/ 25,000,000  a cre«  of  land. 

(1)  Cash  subsides  as  follows: 

(a)  Subsidy  of  |25,000.000  mentioned  iu  section  3  of  act  of  Febru- 

ary 13,  1881. 

(b)  714  milef^pf  railroad  constructed  by  the  Dominion  Goverumeut, 

costing  S35,000, 000,  which  was  presented  to  the  Canadian 
Paciiic  Company  as  a  gift,  with  interest,  to  June  30,  18B7 
(see  public  accounts  of  Canada  for  1867) $61,760,785 

(2)  Capital  stock  originally  ^100,000,000,  but  reduced  to  $65,000,000,  with 

a  minimum  dividend  of  3  per  cent,  guarantied  for  ten  years 

(see  Poor's  Manual) 05,000,000 

(3)  During  the  session  of  Parliament  of  1884,  the  Dominion  Government 

authorized  a  loan  to  the  company  of  $29,880,912,  to  be  paid 
as  the  work  of  construction  progressed,  and  for  the  purpose 
of  expediting  construction.  This  consisted  of  ;S9,880,912 
secured  by  lien  on  the  entire  road  and  land  grant,  subject  to 
the  then  outstanding  land-grant  bonds;  also  Government 
bonds  to  the  amount  of  $20,000,000,  which  was  exchanged 
for  a  like  amount  of  the  company's  loan  of  $35,000, 000^  which 
had  been  issued  in  the  place  of  the  $35,000,000  of  original 
stock  which  had  been  retired  (see  sec.  4,  act  20th  July, 

1885) 29,&'i0.912 

.  (4)  Balance  of  $35,000,000  loan  after  deducting  $20,000,000  placed  in  the 
hands  of  the  Government  in  order  to  secure  the  $20,000,000 
bonds  above  mentioned  ...„ 15, 000, 000 

(5)  Land-grant  bonds  issued  by  the  company  as  a  lien  upon  the  lands 

which  it  acquired  by  gift  of  the  Dominion 25, 000, 000 

(6)  Bonds,  interest  guarantied  by  the  Dominion  for  fifty  years  at  3^  per 

cent,  issued  to  the  company  for  the  purpose  of  remunerating  . 

it  for  thelossofitsrelinquishmentof  the  moDopoly  of  railroad 

building  in  Manitoba 15,000,000 

(7)  Subsidy  of  $186,000  a  year  for  twenty  years  for  a  line  through  the 

State  of  Maine 3,720,000 

Total 215,361,697 

Of  this  sum  about  $105,000,000  may  be  classed  as  cash  and  gifts 
available  as  cash,  and  $110,000,000  as  guaranties  of  securities. 

According  to  the  balance  sheet  of  the  company  for  December,  1888, 
the  total  cost  of  the  road,  and  its  equipment,  plant,  materials,  and  sup- 
plies was  $167,093,895.  The  total  stock,  bonded  debt,  and  current 
liabilities  of  the  company  on  the  same  day,  amounted  to  $131,350,019. 
From  this  it  appears  that  the  various  aids  received  from  the  Govern- 
ment at  their  par  value  were  $48,267,802  in  excess  of  the  cost  of  the 
road,  and  $84,011,678  in  excess  of  its  liabilities. 


:rrv: 


*■■:■  ^-"^l  i*--  v^  '-^  :  •' 


THE  UNITED  STATES  AND  CANADA. 


651 


DOMINION  AIDS  TO  THE  CANADIAN  PACIFIC  RAILWAY. 

In  order  to  give  you  a  clear  idea  of  the  interest  which  the  Canadian 
Gove^'nment  has  in  the  Canadian  Pacific  as  a  commercial  and  political 
enterprise,  I  have  prepared  for  you  the  following  schedule  of  gifts, 
guaranties,  exemptions,  concessions,  and  franchises  granted  to  the 
company  by  the  Dominion  Government: 

(a)  Direct  gifts  of  money,  land  grant,  and  other  privileges  which  have 

become  available  as  cash  assets  in  the  processes  of  funding,  as 

before  stated $105,000,000 

(b)  Bonds  and  stock  guarantied  by  the  Dominion  Government  as  before 

stated 110,000,000 

(c)  Exemption  from  taxation  for  all  time.    As  the  taxes  on  both  the  Union  Pacific 

and  Southern  Pacific  Companies  exceed  $1,000,000  a  year  (see  Poor's  Manual), 
I  assume  that  the  Canadian  Pacific  taxes  remitted  would  amount  to  at  least 
§()00,000  a  year. 

(d)  Remission  of  duties  onrfvilsand  all  imported  material,  liiiiountiug  to 

at  least $7,000,000 

(e)  Protection  against  the  construction  of  competing  lines  for  twenty  years,  the 

value  of  which  concession  can  not  be  accurately  estimated.  To  an  American 
line  such  a  concession  would  constitute  a  guaranty  of  a  fair  rate  of  interest 
on  the  cost  of  the  road. 
(/)  The  Dominion  Government  has  granted  an  annual  subsidy  of  §180,000  to  the  por- 
tion of  the  line  of  the  Canadian  Pacific  Railway  which  extends  across  the 
State  of  Maine.  The  obvious  effect  of  this  line  would  be  to  divert  American 
aud  Canadian  commerce  from  Boston  and  Portland,  Me. 

COST  OF    CANALS  AND  RAILWAYS. 

In  the  construction  of  her  canals  and  railways,  Canada  has  expended 
in  cash  over  $200,000,000,  and  granted  exemptions  and  franchises  which 
undoubtedlv  swell  the  total  value  of  governmental  aid  to  nearly  $300,- 
000,000. 

The  intimate  association  of  the  Government  of  Canada  with  the  trans- 
portation interests  of  the  Dominion  is  clearly  indicated  by  the  fact  that 
in  order  to  secure  the  commercial  and  political  union  of  the  Provinces, 
by  means  of  railroad  construction,  the  i)eople  of  Canada  have  su  omitted 
to  a  burden  of  debt  equal,  in  proportion  to  population,  to  the  burden 
of  debt  which  was  assumed  by  the  people  of  the  United  States  in  order 
to  save  the  Union.  This  burden  has  been  willingly  borne  by  the  people, 
and  to-day  this  association  of  x^olitical  powers  with  the  control  of  the 
transportation  interests  of  the  Dominion  in  such  manner  as  to  affect 
both  political  and  commercial  objects,  is  the  predominating  political 
sentiment  of  the  Dominion. 

It  is  my  firm  belief  that  if  the  i^resent  administration  of  governmental 
affairs  in  Canada  should  go  out  of  power,  by  the  death  of  Sir  John  Mac- 
donald  or  otherwise,  no  political  party  which  should  attempt  to  re- 
verse this  political  transportation  policy  of  the  Dominion  could  retain 
power  for  six  months,  so  intimately  has  this  policy  become  interwoven 
into  the  very  fabric  of  government. 

''      ■   •  '  '    ^  ■       PUBLIC   DEBT   OF    CANADA.  •       n;  V 

'  The  public  debt  of  Canada  increased  from  $93,000,000  in  1867,  the 
year  of  the  confederation,  to  $235,107,948  on  the  30th  of  November, 
1889.  This  increase  in  the  Dominion  debt  since  the  confederation  has 
been  due  chiefly  to  the  construction  of  the  great  political  railroads  of 
Canada.        -y,^*';'.v^^j:i.-.^r';;t  ,^:... 

When  we  consider  our  Canadian  relationships  we  must  rememljei 


,.:  wu.j!»;;d«y 


652  TEANSPORTATION    INTERESTS    OF 

that  we  are  dealing  not  only  with  ^  government  but  with  a  great  sy* 
tem  of  transportation  sharply  comi  >  ting  with  the  ccmmercial  and  trans- 
portation interests  of  the  United  States.  If  the  Dominion  of  Canada 
were  as  completely  separated  from  actual  conduct  of  commerce  and 
transportation  as  is  the  United  States,  our  Canadian  relationships  would 
be  purely  of  a  political  character ;  but  the  difficulty  involved  in  the 
whole  matter  is  that  the  United  States  Goveroment  in  its  foreign  policy 
is  ingenuously  political  while  the  Dominion  Government  is  shrewdly 
commercial  from  the  compulsion  of  proprietary  interests  and  financial 
obligations.  The  fact  that  the  ownership  and  control  of  railroads  is  a 
fundamental  part  of  its  policy  makes  it  commercially  aggressive.  The 
very  fact  of  its  ownership  of  canals  and  railroads  and  its  deep  interest 
in  commerce  and  transportation  for  political  purposes  subjects  it  to  a 
sort  of  public  responsibility  of  which  we  have  no  conception  in  this  coun- 
try. By  virtue  of  these  facts  the  Dominion  Government  is  necessarily 
aggressive.  The  veiy  fact  that  the  Dominion  Government  has  assumed 
responsibility  for  the  commercial  success  of  the  country  brings  to  bear 
upon  it  a  public  responsibility  which  compels  it  to  have  recourse  to  all 
the  sharp  expedients  of  transportation  and  of  trade.  So  we  see  the  Do- 
minion Government  doing  toward  the  transportation  lines  of  the  United 
States  just  as  one  great  railroad  company  is  doing  toward  another. 

This  fact  is  now  clearly  appreciated  by  the  Inter-State  Commerce 
Commission.  In  their  third  annual  report,  just  issued,  referring  to  the 
Canadian  railroads  generally,  the  Commission  say: 

They  are  practically  under  no  restrictions  imposed  by  their  own  statutes  in  re- 
spect to  long  and  short,  haul  trafiBc,  but  are  at  liberty  to  charge  high  rates  on  local 
business  to  indemnify  for  losses  on  through  or  international  business.  Their  man- 
agers deny»  with  more  or  less  emphasis,  that  their  local  traffic  is  subjected  to  higher 
rates,  but  when  the  liberty  to  make  such  charges  and  the  necessity  for  it  can  exist, 
tbe  inducement,  at  least,  is  strong.  The  provisions  of  the  Canadian  statute  on  this 
8ubj«'ct,  are  as  follows: 

"Sec.  !;i26.  The  company  in  fixing  or  regulating  the  tolls  to  be  demanded  and  ta- 
ken for  the  transportation  of  goods,  shall,  except  in  respect  to  through  traffic  to  or  from 
the  United  Statts,  adopt  and  conform  to  any  uniform  classification  of  freight  which 
the  governor  in  council  on  the  report  of  the  minister,  from  time  to  time  prescribes. 

"Sec.  "232.  No  company  in  fixing  any  toll  or  rate  shall,  under  like  conditions  and 
oircumstances,  make  any  unjust  or  partial  discrimination  between  different  localities, 
but  no  discrimination  between  localities,  winch  by  reason  of  competition  by  water  w 
i  ailway,  it  is  necessary  to  make  to  secure  traffic,  shall  be  deemed  to  be  unjust  or  partial." 

These  enactments  give  all  traffic  carried  in  competion  with  our  carriers  unlimited 
freedom. 

In  a  word,  the  Dominion  Government  in  the  conduct  of  its  railroad 
policy  is  doing  as  railroad  managers  are  doing  everywhere.  Railroad 
managers  are  engaged  in  a  never  ending  fight.  That  is  a  characteristic 
of  competition.  The  Canadian  aggression  upon  American  interests  is 
therefore  a  natural  expression  of  the  character  of  their  Government. 

That  fact  to  my  mind  is  a  very  important  one,  and  it  seems  to  me  to 
be  the  root  of  the  whole  matter.  Just  take  the  whole  case  in  review. 
First,  the  Canadian  ownership  of  canals,  which  cost  $52,000,000;  second, 
the  direct  ownership  and  management  of  the  intercolonial  system,  which 
cost  $46,000,000,  and  third,  the  interest  of  the  Dominion  Government  in 
the  Canadian  Pacific  Railway,  which  it  has  aided  in  various  ways  to  the 
amount  of  $215,000,000.  All  this  has  really  transformed  the  Dominion 
Government  from  a  political  organization  into  a  commercial  institution — 
an  aggressive  transportation  system.  At  least  that  is  the  character 
it  assumes  towards  the  United  States  in  all  matters  of  international  re- 
lationships. 

A  man  gets  himself  into  a  certain  method  of  doing  business  and  he 
has  got  to  follow  up  that  line  of  policy  in  order  to  succeed.    Just  so  it 


"    -    .  s  ;■ 


THE    UNITED    STAIES   AND    CANADA. 


653 


is  with  a  government.  It  is  by  a  faithful  adherence  to  this  sort  of 
l)olicy  that  the  present  MacdonaUl  government  has  become  so  firmly 
intrenched  in  power.  It  is  impossible  for  his  party  to  enter  into  any 
treaty  agreement  which  would  relieve  it  from  the  necessity  of  having 
recourse  to  all  those  tactical  and  strategetical  expedients  with  which 
the  great  trunk  lines  of  the  country  are  continually  competing  with  each 
other.  So  I  favor  reciprocal  legislation  with  Canada  in  preference  to 
commercial  treaties,  and  as  we  hold  the  advantage  over  Canada  all 
-along  the  line  we  can  dictate  the  detail  of  our  Canadian  relationships. 
It  is  difl&cult  for  us  in  the  United  States  to  appreciate  the  force  of 
public  sentiment  which  in  Canada  has  created  a  vast  public  debt  for 
the  construction  of  railways  and  canals  and  which  compels  the  admin- 
istration of  the  Dominion  to  manage  those  enterprises  ''  ^cording  to 
the  dictates  of  apparent  commercial  need. 


THE      TRANSATLANTIC     AND     TRANSPACIFIC      STEAMER     LINES 
CONNECTIONS  OF  THE  CANADIAN  PACIFIC  RAILWAY. 


AND 


Upon  the  completion  of  the  Canadian  Pacific  Railway,  in  the  spring 
of  1886,  a  line  of  steamers  was  established  between  Vancouver,  British 
Columbia,  and  China  and  Japan.  Recently  the  preliminary  steps  have 
been  taken  for  the  establishment  of  a  British  steamer  line  from  Van- 
couver to  Australia  and  New  Zealand  ;  also  for  the  establishment  of  a 
steamer  line  from  St.  Johns,  New  Brunswick,  and  Quebec,  to  Liv*er- 
pool.  The  provisions  of  law  for  the  establishment  of  the  British  lines 
lust  mentioned  are  embraced  in  the  following  act  of  the  Dominion 
Government,  passed  at  its  late  session : 

AN  ACT  relating  to  ocean  steamship  subsidies. 

Her  Majesty,  by  and  with  the  advice  a  nd  consent  of  the  Senate  and  House  of  Com 
nions  of  Canada,  enacts  as  follows: 

1.  The  governor  in  council  may  grant  to  any  individual  or  company  a  subsidy 
not  exceeding  the  sum  of  twenty-five  thousand  pounds  sterling  per  annum,  to  assist 
in  establishing  an  effective  fortnightly  steam-ship  service  between  British  Columbia 
and  the  Australian  colonies  and  New  Zealand,  or  such  proportion  thereof  as  is  decided 
up<m  by  the  governor  in  council  to  assist  in  establishing  a  monthly  service  with  the 
«aid  countries,  such  subsidy  to  be  granted  for  such  term  of  years,  not  exceeding  ten, 
ami  on  such  conditions  as  the  governor  in  council  considers  expedient. 

2.  The  governor  in  council  may  grant  to  any  individual  or  company,  to  whom 
there  is  ^^ranted  by  the  Government  of  the  United  Kingdom  the  aid  hereinafter  men- 
tioned, a  subsidy  not  exceeding  the  sum  of  fifteen  thousand  pounds  sterling  per  an- 
num for  a  monthly  steam-ship  service,  or  a  subsidy  not  exceeding  the  sum  of  twenty- 
five  thousand  pounds  sterling  per  annum,  for  a  fortnightly  steam-ship  service  between 
British  Columbia  and  China  and  Japan,  such  subsidy  to  be  granted  for  such  term  of 
years  and  on  snch  conditions  as  the  governor  in  council  considers  expedient :  PrO' 
tided  always,  That  during  such  term  the  Government  of  the  United  Kingdom  grants 
to  such  individual  or  company  a  subsidy  of  not  less  thar.  forty-five  thousand  pounds 
sterling  per  annum  for  the  monthly  service,  or  of  not  less  than  seventy-five  thousand 
pounds  sterling  per  annum  for  the  fortnightly  service  above  moHtioned. 

3.  The  governor  in  council  may  enter  into  a  contract  for  a  term  not  exceeding  ten 
years  with  any  individual  or  company  for  the  performance  of  a  fast  weekly  steam- 
ship service  between  Canada  and  the  United  Kingdom,  making  connection  with  a 
French  port,  on  such  terms  and  conditions  as  to  the  carriage  of  mails  and  otherwise 
as  the  governor  in  council  deems  expedient,  for  a  subsidy  not  exceeding  the  sum  of 
five  hundred  thousand  dollars  a  year. 

This  act  provides  for  the  establishment  of  the  following  British  lines 
of  steamers: 

First.  A  fortnightly  line  from  Vancouver  to  Australia  and  New  Zeal- 
and, with  a  Canadian  subsidy  of  $125,000  a  year,  efforts  being  made 
for  securing  an  additional  subsidy  from  Australia  ajjd  Kew  Zealand. 

Second.  A  line  from  Vancouver  to  China  and  Japan,  with  a  subsidy 


654  TRANSPORTATION    INTERESTS    OF 

of  about  1300,000  in  the  case  of  a  monthly  service,  and  of  about  $500,000 
in  the  case  of  a  fortnightly  service;  and 

Third.  A  British  line  of  steamers  from  St.  Johns,  New  Brunswick,  to 
Liverpool,  with  a  Canadian  subsidy  of  $500,000  a  year.  This  is  to  be 
supplemented,  I  understand,  by  a  British  subsidy,  the  amount  of  which 
is  not  known,  but  is  publicly  stated  at  $300,000  a  year,  making  a  total 
subsidy  of  $800,000  a  year. 

The  steamers  of  the  Pacific  line  to  China  and  of  the  Atlantic  line  to 
England  are  to  be  so  constructed  as  to  be  readily  available  as  armed 
cruisers  in  the  military  navy  of  Great  Britain,  and  in  consideration 
thereof  they  are  to  receive  in  addition  to  the  sums  above  mentioned, 
certain  admiralty  or  navy  subsidies,  the  amount  of  which  is  not  pub- 
licly known.  It  is  understood,  however,  that  this  admiraltj'  subsidy 
consists  of  a  construction  bounty  and  subsequent  navigation  bounty, 
which  runs  for  a  term  of  years.  The  steamers  on  the  Atlantic  line  are 
to  be  of  large  size  and  great  speed.  This  scheme  has  been  delayed  by 
Canadian-Pacific  scheming  to  get  the  control  of  a  part  of  the  intercolo- 
nial railway  system,  but  there  can  be  little  doubt  of  the  final  consum- 
mation of  the  whole  plan  as  above  outlined. 

In  the  whole  history  of  commerce  there  is  nothing  in  the  nature  of 
governmental  promotion  which  can  be  compared  to  this  enormous 
scheme  of  subvention,  embracing  the  Canadian  Pacific  Kailway  with 
its  enormous  grants,  privileges,  and  franchises,  and  its  connecting 
ocean  steamer  lines  receiving  enormous  commercial  and  naval  subsidies. 

The  object  of  this  scheme  is  not  alone  Canadian  union  and  Canadian 
commercial  and  political  advancement ;  it  goes  far  beyond  this.  It  is 
part  and  parcel  of  the  gigantic  political  scheme  of  imperial  confedera- 
tion. It  W3,s  in  this  view  that  Lord  Lansdowne,  late  governor-general 
of  ('anada,  declared  that  "  without  the  Canadian  Pacific  Railway  the 
British  North  American  act  was  not  worth  the  paper  it  was  written 
upon." 

The  ruling  political  party  ia  Canada  recognizes  this  fact,  and  the 
leaders  of  that  party  make  no  pretense  of  disguising  it.  The  *'  Hand 
Book  of  Canada,"  published  by  the  Dominion  Government,  states  that 
the  Canadian  Pacific  was  constructed  **in  the  interests  of  the  empire  at 
large,  as  well  as  those  of  Canada."  And  it  adds:  "Had  these  far-see- 
ing plans  been  taken  up  when  [first]  mooted  Canada  would  have  been  at 
least  two  generations  in  advance  of  her  present  position,  whilst  "  Greater 
Britain"  [i.  e.  British  imperial  confederation]  would  have  been  in  a  much 
higher  state  of  development  than  it  is."    This  signifi-cant  remark  also 

follows:         /  •  ,       .  :        ;      ■;        . 

It  was  a  singular  coincidence,  and  perhaps  a  prophetic  omen  of  the  future  imperial 
importance  of  this  railway,  that  the  first  loaded  train  that  passed  over  its  entire  length 
from  ocean  to  ocean  was  freighted  with  naval  stores,  belonging  to  the  imperial  war 
department,  transferred  from  Quebec  to  Vancouver. 

This  shows  the  politico-commercial  aspect  of  the  Canadian  Pacific 
Railway,  in  a  way  which  forces  the  United  States  Government  to 
consider  the  question  as  to  whether  the  United  States  or  the  British 
Empire  is  to  hold  the  commercial  supremacy  on  this  continent. 

These  facts  emphasize  and  more  clearly  bring  out  the  point  which  1 
have  before  stated,  namely,  that  the  United  States  is  confronted  at  the 
north  by  a  government  which  is  thoroughly  committed  to  a  political 
policj- involving  a  participation  in  commerce  which  is  essentially  aggress- 
ive toward  American  interests.  This  is  the  real  question  which  we 
have  to  meet,  and  it  must  be  determined  in  order  to  protect  American 
ships,  American  sea-ports,  and  American  transportation  lines. 


•  -V"    i  -vg 


THE  UNITED  STATES  AND  CANADA. 


655 


This  view  of  the  case  has  been  very  clearly  set  forth  in  the  recent  reso- 
lutions adopted  by  the  commercial  conference  on  the  Pacific  coast, 
wherein  it  is  clearly  shown  that  this  Canadian  and  British  policy  of 
subsidized  steamer  lines  and  subsidized  railroads  across  the  conti- 
nent will  inevitably  break  down  American  steamer  navigation  on  the 
Pacific  Ocean,  the  effect  of  which  will  be  to  divert  commerce  from  the 
Pacific  ports  and  from  our  own  lines  of  transportation  between  Pacific 
coast  ports  and  the  eastern  side  of  the  continent. 


THE   UNITED  STATES  AND  CANADIAN  TRANSIT  TRADE. 

A  clear  understanding  of  our  Canadian  relationship  of  transportation 
involves  a  careful  consideration  of  what  is  commonly  known  as  "  the 
United  States  and  Canadian  transit  trade." 

The  United  States  and  Canadian  transit  trade  had  its  origin  in  an 
exercise  of  administrative  discretion.  A  bout  the  year  1848  the  inference 
was  raised  that  if  under  our  laws  imported  goods  held  in  a  government 
warehouse,  for  example,  in  New  York  City,  could  be  taken  out  of  the 
warehouse  and  transported  across  the  streets  of  New  York  to  a  sea- 
going vessel  and  re  exported  without  the  payment  of  duties,  it  might 
be  lawful  to  take  them  out  of  the  warehouse  in  New  Y^ork  and  place 
them  on  board  of  a  railroad  car  and  ship  them  across  the  United  States 
to  Canada  without  the  payment  of  duty.  This  was  done  and  con- 
stituted the  beginning  of  the  transit  trade.  At  the  same  time  the 
l)rivilege  was  extended  to  Canadians  of  shipping  their  produce  across 
the  United  States  to  be  exported  from  New  York  or  from  Boston  to 
foreign  countries  without  exacting  duties  upon  them  in  the  United 
States.  This  latter  privilege  was  of  great  value  to  the  Canadians,  for  the 
reason  that  the  St.  Lawrence  River  is  closed  by  ice  and  fogs  about  six 
months  of  each  year,  during  which  ])eriod  they  are  practically  interior 
provinces.  At  the  same  time  this  traffic  brought  business  to  shipping 
at  the  x>ort  of  New  Y^ork  and  to  American  transportation  lines,  and  it 
had  about  it  the  essential  elements  of  reciprocity. 

The  St.  Lawrence  system  of  canals  was  completed  about  the  year 
1848.  During  that  year  the  Canadian  Government  very  gladly  ex- 
tended to  the  people  of  the  United  States  the  privilege  of  importing 
and  exporting  goods  through  Montreal  without  the  payment  of  duties 
in  Canada.  The  Canadian  Government  did  everything  it  could  to  en- 
courage this  traflBc  because  it  tended  to  promote  the  commercial  uter- 
ests  of  Canada.  At  the  same  time  it  afforded  to  the  people  of  our  West- 
ern and  Northwestern  States  the  competitive  advantage  of  an  alterna- 
tive route.  This  movement  also  had  about  it  the  essential  elements  of 
reciprocity.  ,       .'        -     :      :,    .     • 

»  These  two  movements,  embracing  the  privilege  afforded  by  each 
country  of  exporting  or  importing  goods  across  the  territory  of  the 
other  without  the  payment  of  duty,  I  shall  hereinafter  designate  as  ^'the 
foreign  transit  trade."  It  may  be  remarked  in  passing  that  the  ad- 
vantages which  the  foreign  transit  trade  affords  to  Canada  are  pro- 
portionately very  much  greater  than  those  afforded  to  the  United  States. 


l«    ^.THE  DOMESTIC  TRANSIT   TRADE. 


ff     -Ui      i^fiih':    :'  - 


There  is  another  and  more  important  branch  of  the  United  States 
and  Canadian  transit  trade  to  which  I  would  more  particularly  invite 
your  attention.    I  refer  to  the  transportation  of  merchandise  from  ono 


■  ^^v^  r:^-^>  r.;?*^-:;; -^j^v- 


>;  . 


^  --^^^ 


656 


Transportation  interests  of 


point  in  the  United  States  to  another  point  in  the  United  Stages  across 
the  territory  of  Canada,  and  to  the  transportation  of  goods  from  one 
point  in  Canada  to  another  point  in  Canada  across  the  territory  of  the 
United  States,  in  both  cases  without  ijayment  of  duty.  This  I  desig- 
nate as  the  domestic  transit  trade.  This  branch  of  the  transit  trade 
had  its  origin  in  the  geographical  circumstance  that  east  of  Minnesota, 
where  the  parallel  of  49  degrees  is  the  international  boundary,  the  terri- 
tory of  the  two  countries  interject,  the  one  into  the  other,  through  a 
range  of  6  degrees,  or  about  400  miles  of  longitude. 

The  entire  settled  portions  of  the  provinces  of  Ontario  and  Quebec 
are  situated  south  of  a  line  drawn  from  the  northern  boundary  of  Min- 
nesota to  the  northernmost  point  of  Maine. 

Just  73  per  cent,  of  the  total  population  of  the  Dominion  of  Canada 
is  embraced  in  this  interjection  of  territory,  as  will  be  seen  from  the 
statement  of  population  recently  prepared  by  the  statistical  bureau  of 
Canada : 


Popalation. 

Ontario 2,189,107 

Quebec 1,496,226 

Nova  Scotia 489,618 

New  Brunswick 348,568 

Manitoba 146,545 


Popnlatioa. 

British  Columbia 150,999 

Prince  Edward  Island 121,852 

Northwest  Territories 106,000 


Total 5,04b,915 


On  the  other  hand,  the  State  of  Maine  almost  separates  the  province 
of  Quebec  from  the  province  of  New  Brunswick. 

Now,  I  beg  you  will  carefully  observe  the  fact  that  the  "  transit 
trade^'  is  based  absolutely  upon  these  interjections  of  territory,  and 
upon  the  fact  that  navigation  on  the  St.  Lawrence  River  is  closed  for 
about  six  months  each  year.  But  for  these  phjsical  characteristics  of 
the  two  countries  on  the  east  side  of  the  continent,  there  never  would 
have  been  any  "  transit  trade." 
,    The  origin  of  the  domestic  "  transit  trade  '^  was  as  follows : 

About  the  1st  of  April,  1855,  the  railway  suspension  bridge  two 
miles  below  Niagara  Falls  was  completed.  By  this  means  the  New 
York  Central  Railroad,  the  Great  Western  Railroad,  of  Canada,  and  the 
Michigan  Central  Railroad  formed  the  first  all-rail  line  from  New  York 
to  Chicago,  with  the  single  break  caused  by  the  Detroit  River,  which 
was  crossed  by  a  ferry.  A  large  freight  and  passenger  traffic  at  once 
sprung  into  existence  over  this  line. 

The  question  arose  whether  American  goods  could  be  loaded  into  a 
foreign  railroad  car  at  Suspension  Bridge  and  carried  across  the  inter- 
jecting territory  of  Canada  to  Detroit  without  the  payment  of  duty. 
The  analogy  furnished  by  our  navigation  laws,  which  forbid  the  car- 
riage of  goods  from  one  point  in  the  United  States  to  another  point  in 
the  United  States  in  any  other  than  an  American  vessel,  was  set  aside. 
In  the  absence  of  any  specific  statute  on  the  subject,  the  authorities  at 
Washington  yielded  to  the  popular  demand,  and  thus  the  domestic 
transit  trade,  like  the  foreign  trausit  trade,  had  its  origin  in  the  mere 
exercise  of  administrative  discretion.  The  Canadian  government  very 
freely  acceded  to  the  arrangement,  for  it  was  one  of  great  advantage 
to  the  traffic  interests  of  the  then  most  important  railroad  in  Canada, 
the  Great  Western  Railroad. 

Since  the  inauguration  of  the  domestic  trausit  trade  over  the  Cana- 
dian route  ju^t  mentioned,  the  relative  importance  of  that  route  has 
greatly  decreased  in  consequence  of  the  construction  of  the  several 
powerful  trunk  lines  south  of  Lake  Erie,  which  carry  the  great  bulk  of 
the  commerce  between  the  West  and  the  sea-board. 


THE   TJNitEb   SlAtES   AND   CANADA.        '  *         65  V 

TRANSIT  TRADE  LEGISLATION  AND  TREATY  STIPULATIONS. 

Both  branches  of  the  transit  trade  hereinbefore  described  and  desig- 
nated as  the  foreign  trausit  trade  and  the  domestic  transit  trade,  existed 
from  the  time  of  their  inception  by  virtue  of  administrative  discretion, 
and  in  the  absence  of  any  specific  provisions  of  law  sanctioning  them, 
until  July  28, 18G6,  when  the  following  act  of  Congress  was  passed 
(Revised  Statutes,  sections  3005  and  3006,  Chapter  CCXCVIII,  ap- 
proved July  28, 1866) : 

AN  ACT  to  protect  the  rerenae  and  for  other  parpoees. 

Sec.  5.  And  he  it  further  enacted,  That  from  and  after  the  passage  of  this  act,  all 

floods,  wares,  or  merchandise  arriving  at  the  ports  of  New  York.  Boston,  and  Port- 
and,  or  any  other  port  of  the  United  States  which  may  be  specially  designated  by 
the  Secretary  of  the  Treasary,  and  destined  for  places  in  the  adjacent  British  Prov- 
inces, or  arriving  at  the  port  of  Point  Isabel,  Texas,  or  any  other  port  of  the  United 
States  which  may  be  specially  designated  by  the  Secretary  of  the  Treasury,  and  des- 
tined for  places  in  the  Republic  of  Mexico,  may  be  entered  at  the  custom-house  and 
conveyed,  in  transit,  through  the  territory  of  the  United  States,  without  the  pay- 
ment of  duties,  under  such  rules,  regulations,  and  conditions  for  the  protection  of  the 
revenue  as  the  Secretary  of  the  Treasury  may  prescribe. 

Sec.  6.  And  be  it  further  enacted,  That  imported  goods,  wares,  or  merchandise  in 
"bond,  or  duty  paid,  and  products  or  manufactures  of  the  United  States,  may,  with 
the  consent  of  the  proper  authorities  of  the  provinces  or  republic  aforesaid,  be  trans- 
ported from  one  port  or  place  in  the  United  States  to  another  port  or  place  therein, 
over  the  territory  of  said  provinces  or  republic,  by  such  routes  and  under  such  rules 
jegulations,  and  conditions  as  the  Secretary  of  the  Treasury  may  prescribe ;  and  the 
goods,  wares,  or  merchandise  so  transported  shall,  upon  arrival  in  the  United  States 
from  the  provinces  or  republic  aforesaid,  be  treated  in  regard  to  the  liability  to.  or 
■exemption  from  duty  or  tax  as  if  the  transportation  had  taken  place  entirely  within 
the  limits  of  the  United  States. 

Section  5  of  the  act  above  quoted  in  terms  legalized  the  foreign 
transit  trade,  while  section  6  as  specifically  legalized  the  domestic 
transit  trade.  The  next  measure  in  the  order  of  time  having  reference  to 
the  establishment  of  the  United  States  and  Canadian  transit  trade  is 
found  in  the  twenty-ninth  article  of  the  treatj^  of  Washington,  which  -  ji 

was  concluded  May  8,  1871.    That  article  is  as  follows : 

Article  XXIX. 

It  io  agreed  that,  for  the  term  of  years  mentioned  in  Article  XXXIII  of  this  treaty, 
•Koods,  wares,  or  meuchandise  arriving  at  the  ports  of  New  York,  Boston,  and  Port- 
land, and  any  other  ports  in  the  United  States  which  have  been  or  may,  from  time 
to  time,  be  specially  designated  by  the  President  of  the  United  States,  and  destined 
'ibr  Her  Britannic   Majesty's  possessions  in  North  America,  may  be  entered  at  the 
proper  custom-house  and  conveyed  in  transit,    without  the  payment  of  duties, 
through  the  territory  of  the  United  States,  under  such  rules,  regulations,  and  condi- 
.tious  for  the  protection  of  the  revenue  as  the  Government  of  the  United  Stat**s  may 
from  time  to  time  prescribe ;  and,  under  like  rules,  regulations,   and  conditious, 
goo<ls,  wares,  or  merchandise  may  be  conveyed  in  transit,  without  the  payment  of 
duties,  from  such  possessions  through  the  territory  of  the  United  States  for  export 
from  the  said  ports  of  the  United  States.  . 

It  is  further  agreed  that,  for  the  like  period,  goods,  wares,  or  merchandise  arriving  -^ 

«t  any  of  the  ports  of  Her  Britannic  Majesty's  possessions  in  North  America,  and 
destined  for  the  United  States,  may  be  entered  at  the  proper  cuntom-honse  and  con- 
veyed in  transit,  without  the  payment  of  duties,  through  the  said  possessions  under 
such  rules  and  regulations  and  conditions  for  tlie  protection  of  the  revenue  as  the 

fovemments  of  the  said  possessions  may  from  time  to  time  prescribe;  and,  undei 
ike  rules,  regulations,  Jind  conditions,  goods,  wares,  or  merchandise  mav  be  con- 
veyed in  transit,  without  payment  of  duties,  from  the  United  States  through  the  said 
possessions  to  other  places  in  the  United  States  or  for  export  from  ports  in  the  said 
possessions. 

This  treaty  of  Washington  was  concluded  fifteen  years  before  the 
•Ca  iiidian  Pacific  Bailway  was  constructed,  and  only  "two  years  after 
6543 42 


>• 


658  .        TRANSPORTATION   INTERESTS   OF 

rij 

the  first  transcontinental  railroad  was  completed  in  this  country.  It  th 
is  absolutely  certain  that  it  never  would  have  been  signed  by  any  sane 
American  commissioner  nor  ratified  by  any  American  Congress  in  the 
presence  of  the  conditions  which  now  govern  the  transportation  inter- 
ests of  the  United  States  and  of  the  eftbrts  which  are  now  being  made 
by  the  Canadian  and  British  Governments  to  grasp  American  commerce 
and  to  exploit  British  imperial  confederation  on  this  continent. 

And  now  let  us  briefly  recapitulate  the  leading  facts  hereinbefore 
stated  in  regard  to  the  transit  trade. 

Both  branches  of  that  trade  were  inaugurated  by  administrative  dis- 
cretion, ^subsequently  they  were  sanctioned  by  the  act  of  July  28, 
18G0,  and  bj'  article  29  of  the  treaty  of  Washington.  All  this  was 
prompted  and  justified  by  the  particular  circumstances  of  interjecting 
territory,  by  the  disability  under  which  the  provinces  of  Quebec  and 
Ontario  labor  of  having  no  winter  sea-ports,  and  by  the  advantage  of 
competition  which  the  St.  Lawrence  River  route  affords  to  our  Western 
and  Northwestern  States  during  the  season  of  navigation. 

On  the  western  side  of  the  continent  the  case  is  entirely  different. 

Not  one  of  the  conditions  which  justify  the  transit  trade  on  the  east- 
ern side  of  the  continent  exists  as  a  justification  of  the  extension  of  the 
privileges  of  that  trade  to  the  western  side  of  the  continent;  but,  not- 
withstanding this  obvious  and  most  important  characteristic  of  the 
commercial  life  of  the  country,  upon  the  completion  of  the  Canadian 
Pacific  Railway  to  the  Pacific  Ocean,  in  the  month  of  May,  188(5,  the 
Secretary  of  the  Treasurj*  granted  to  the  Canadian  Pacific  Railway 
Company  the  privileges  of  the  transit  trade,  so  that  it  was  enal^led  at 
once  to  enter  into  competition  with  the  American  lines  for  the  domestic 
traffic  of  the  United  States  across  the  continent,  and  also  of  competing, 
by  the  sheer  force  of  British  and  Canadian  governmental  subsidy,  with 
American  steamer  lines,  American  sea-ports,  and  American  railroads 
for  our  Asiatic  commerce. 

I  am  aware  of  the  fact  that  under  a  familiar  rule  of  construction,  a 
statute  of  a  general  nature,  although  in  its  form  permissive,  is  never- 
theless mandatory  upon  the  officers  of  the  Government  charged  with 
its  administration,  and  that  Sec.  6,  of  the  act  of  July  28,  186C,  may  be 
regarded  in  this  light.  There  is,  however,  a  question  as  to  whether  the 
Secretary  did  or  did  not  err  in  allowing  the  transit  trade  on  the  Pacific 
coast  to  be  conducted  in  i)art  by  vessel  and  in  part  by  rail,  embracing 
the  transfer  of  cargo  on  foreign  soil.  But  I  submit  to  the  committee 
that  the  historic  facts  which  alone  justified  the  enactment  of  that  law, 
and  the  questions  of  public  policy  which  now  confront  the  country  re- 
garding the  encroachment  of  the  Dominion  Government  upon  the  navi- 
gation, transportation,  and  commercial  interests  of  the  United  States 
clearly  demand  that  under  specific  statutory  provisions,  the  "  transit 
trade"  shall  be  limited  to  the  conditions  under  which  it  was  origi- 
nally established,  and  to  the  specific  purposes  which  it  still  subserves  on 
the  eastern  side  of  the  continent.  ■   v 

I  maintain,  however,  that  in  a  certain  particular  the  *' transit  trade" 
as  now  conducted  on  the  Pacific  coast  is  in  open  violation  of  our  laws 
for  the  protection  of  the  revenue  from  customs. 

THE  TRANSIT   TRADE  ON  THE  EASTERN  AND  ON  THE  WESTERN  SIDE 

OF  THE  CONTINENT.  ^ 

Now,  what  are  the  real  differences  between  the  apptication  of  the 
transit  trade  on  the  eastern  side  of  the  continent  and  on  the  western 
side  !    To  make  this  perfectly  clear  to  your  committee,  even  at  the 


I 


THE    UKITKD    STATES   AND   CANADA.  659      " 


risk  of  repeatinjr  what  bas  already  been  said,  T  invite  your  attention  to 
the  following  statemeiit,  sliowing  si)ecitically  the  radical  differences 
which  exist  between  the  conditions  under  which  tlie  transist  trade  ex- 
ists on  the  eastern  and  on  the  western  side  of  the  continent. 

First.  The  eastern  transit  trade  is  across  interjecting  Canadian  ter- 
ritorj',  in  part  over  an  American  line,  the  Canada  Southern  Railway. 
There  is  no  such  inteijecting  territory  on  the  west  side  of  the  continent, 
and  the  exclusive  privileges  of  railway  construction  granted  to  the  Can- 
adian Pacific  do  not  tolerate  such  an  American  competitor  in  British 
Columbia. 

Second.  The  transit  across  this  interjecting  territory  at  the  east, 
while  enabling  some  of  the  principal  railroads  of  Canada  to  i^articipate 
in  our  domestic  traffic,  affords  the  reciprocal  advantage  to  American 
shippers  of  short  and  direct  lines  between  our  l!^orth western  and  our 
New  England  States ;  but  no  such  advantage  of  a  shorter  line  is  af- 
forded by  the  Canadian  Pacific  on  the  western  side  of  the  continent. 

Third.  The  most  po])ulou8  and  most  wealthy  portion  of  the  Dominion 
of  Canada  is  for  six  months  of  the  year  dependent  upon  transit  across 
the  territory  of  the  United  States  for  free  commercial  intercourse  with 
foreign  countries.  But  no  such  disability  affects  British  Columbia.  In 
common  with  all  the  Pacific  coast  ports,  as  far  north  as  Sitka,  Alaska, 
the  ports  of  British  Columbia  are  open  all  the  year. 

Fourth.  The  eastern  transit  trade  lines  tend  to  bring  trade  to  Amer- 
ican sea  ports,  while  the  Canadian  Pacific  Kail  way,  with  its  British 
steamer  line  adjuncts,  operates  very  strongly  to  turn  American  com- 
merce from  American  sea-ports,  a  fact  which  has  created  great  alarm  on 
our  Pacific  coast  and  has  led  the  convention  of  commercial  and  indus- 
trial organizations  of  that  section  to  utter  an  earnest  and  entirely  non- 
partisan appeal  to  Congress  for  protection  against  the  aggressions  of 
the  Canadian  and  British  Governments. 

Fifth.  The  St.  Lawrence  River  and  Canadian  canals  afford  the  com- 
petitive advantages  of  an  alternative  route  to  the  people  of  our  Western 
and  Northwestern  States  for  six  months  of  the  year ;  but  no  such  nat- 
ural advantages  of  water  transportation  through  Canada  exist  on  the 
western  side  of  the  continent.  We  have  no  nee'^  to  cross  Canadian 
territory  there,  even  for  the  purpose  of  gaining  the  advantages  of  an 
alternative  route. 

Sixth.  The  railroads  of  Canada,  which  were  allowed  to  engage  in  the 
transit  trade  under  the  privileges  of  the  act  of  July  28,  1866,  and  of 
article  29  of  the  treaty  of  Washington,  were  all  constructed  as  com- 
mercial enterprises,  on  commercial  principles  and  to  subserve  merely 
commercial  purposes,  but  the  Canadian  Pacific  Railway,  as  I  have  be- 
fore shown,  was  constructed  by  the  Dominion  Government  for  political 
i  purposes  distasteful  to  and  in  a  measure  inimical  to  the  United  States. 
I  This  is  fully  evidenced  by  the  contribution  of  $215,000,000  in  gifts 
and  other  subventions  by  the  Dominion  Government  to  the  Canadian 
Pacific  Railway ;  by  the  exemption  of  the  property  of  that  company 
from  taxation,  amounting  to  $600,000  a  year;  by  the  remission  of 
duties  on  rails  and  other  materials,  amounting  to  $7,000,000  upon  the 
basis  of  the  rates  of  duty  charged  in  the  United  States;  by  protection 
against  the  construction  of  competing  lines,  and  by  the  subsidy  to  the 
Canadian  Pacific  lines  across  the  State  of  Maine,  amounting  to  $186,000 
a  year. 

Seventh.  The  Canadian  Pacific  Railway  has  as  adjuncts  a  steamer  , 
line  to  Asia  so  heavily  subsidized  by  tae  Canadian  government  as  to  ' 
threaten  the  ruin  of  American  steamer  lines  between  San  Francisco  and 


-*^-.;  V      "      ,■    \  ■•  ■  -    •■  ■'  ■■ '  .■•    '.-   .   ■    -,.    ••    '-:'  '•^:----     ,    •■  i~  :  .-'.    'v-   ■''■^-''   .■  ,^li-^-' 


660  TRANSPORTATION   INTERESTS   OF 

ports  in  Asia,  and  to  divert  our  Asiatic  commerce  from  American  sea- 
ports to  tbe  Canadian  port  of  Vancouver.  The  Canadian  and  British 
Governments,  with  the  idea  of  the  imperial  confederation  of  the  British 
Empire  prominently  in  view,  are  now  planning  for  the  establishment  of 
a  heavily  subsidized  British  steamer  line  to  Australia  and  New  Zealand. 
This  will  ruin  our  American  line  to  these  islands  unless  we  adopt  meas- 
ures which  will  protect  it  against  the  efforts  of  the  Dominion  Govern- 
ment to  destroy  it. 

Those  governments  are  also  planning  for  a  heavily  subsidized  trans- 
Atlantic  steam  r  line  from  St.  John's  or  Halifax  to  Liverpool.  This  line? 
would  tend  to  divert  commerce  from  New  York,  Boston,  and  Portland^ 
Me.  But  no  schemes  for  diverting  commerce  from  American  ships,, 
from  American  sea- ports,  and  from  American  transportation  lines  char- 
acterized the  railroads  which  were  authorized  to  engage  in  the  transit 
trade  bj'  the  act  of  July  28,  1866,  or  by  the  treaty  of  Washington  of 
1871.  As  I  have  before  remarked,  that  treaty  would  never  have  been 
signed  by  any  sane  commissioner  if  it  had  been  characterized  by  any 
such  feature  of  hostility  to  American  interests. 

Eighth.  The  Canadian  Pacific  Railway  is  closely  identified  with  raili* 
tary  objects,  which  were  at  the  beginning  urged  with  eff^ect  both  in  Can- 
ada and  Great  Britain  in  favor  of  the  construction  of  that  road.  Thi» 
feature  of  the  enterprise  is  accentuated  by  the  formidable  fortress  and 
naval  station  at  Esquimault  on  the  Island  of  Vancouver,  and  it  is  also 
indicated  by  tlie  fact  already  noted  that  the  first  train  which  passed 
over  the  Canadian  Pacific  upon  its  completion  was  loaded  with  material 
of  war.  No  objectionable  feature  of  this  nature  characterized  the  tran- 
sit trade  authorized  by  the  act  of  July  28,  186^3,  and  by  the  treaty  of 
Washington,  and  it  is  certain  that  the  privileges  of  the  transit  trade 
should  never  be  grante<l  to  any  railroad  which  is  characterized  by  any 
such  objectionable  features. 

THE   POSSIBILITY  OF   CANADIAN   RETALIATION. 

The  qnestion  of  expediency  has  been  suggested  as  to  the  eifect  which 
the  suspension  of  the  privileges  of  the  transit  trade  on  the  western  side 
of  the  continent  might  have  upon  Aniericau  interests  in  case  the  Cana- 
dian government  should  see  fit  to  retaliate  by  curtailing  the  privilege 
of  the  transit  trade  on  the  eastern  side  of  the  continent.  Nothing  could 
be  more  absurd  than  to  apprehend  evil  to  any  American  interests  from 
this  source.  In  the  whole  matter  of  the  transit  trade  from  New  Bruns- 
wick to  Vancouver  the  United  States  holds  an  overpowering  advantage 
over  Canada  at  every  point.  The  entire  suspension  of  this  trade  would 
be  of  comparatively  small  disadvantage  to  the  United  States,  whereas 
it  would  be  utterly  disastrous  to  Canada.  If  the  Dominion  Government 
should  forbid  the  transportation  of  Canadian  goods  in  bond  and  free  of 
duty  across  the  State  of  Maine  over  the  new  subsidized  Canadian  Pacific 
line,  or  should  forbid  the  transportation  of  goods  across  tbe  territory  of 
the  United  States  through  the  ports  of  New  York,  Boston,  and  Port- 
land, Me.,  in  the  conduct  of  the  foreign  commerce  of  Canada,  or  should 
forbid  the  carriage  of  American  merchandise  from  one  point  in  the 
United  States  to  another  point  in  the  United  States  across  the  inter- 
jecting territory  of  the  provinces  of  Ontario  and  Quebec,  or  should  for- 
bid  the  Northwestern  States  from  carrying  on  foreign  commerce  through 
the  port  of  Montreal  except  upon  payment  of  duty,  such  action  would 
wreck  the  commercial,  industrial,  ami  transportation  interests  of  Can- 
ada  and  in  a  moment  dispel  the  cherished  dream  of  Canadian  commer- 
cial supremacy  upon  this  continent. 


'r.;j  it.:i^:  .:  V '•    7      -:'  -Z     \      ■■-}     ■'t\  -     J    ;■       "      '     '•  '*     ■  .  <''  '  --'v^ 


THE    UNltED    STATES   AND   CANADA.  661 

To  assume  that  the  suspension  of  the  privileges  of  the  transit  trade 
on  the  western  ¥ide  of  the  continent,  where  there  is  no  justifiable  ex- 
cuse for  its  existence,  would  lead  the  Canadian  government  to  retali- 
ate by  any  interference  whatever  with  the  eastern  transit  trade  would 
be  to  impeach  the  common  sense  of  the  exceedingly  astute  and  able 
men  who  now  control  the  political  affairs  of  Canada.  Nothing  could 
be  more  puerile  than  such  an  assumption.  It  is  to-day  entirely  within 
the  discretion  of  the  Government  of  the  United  States  to  afford  ample 
protection  to  American  shipping  interests,  to  American  sea-ports,  and  to 
American  transportation  lines  against  Canadian  encroachment  on  the 
western  side  of  the  continent  without  the  slightest  ground  for  appre- 
hending any  sort  of  Canadian  retaliation  on  the  eastern  side  of  the 
continent. 

It  is  high  time  for  the  people  of  this  country  to  appreciate  the  fact 
that  their  national  Government  holds  a  preponderance  of  commercial 
power  on  this  continent  as  absolute  as  the  preponderance  of  its  mili- 
tary power,  and  to  demand  that  those  who  are  charged  with  the  affairs 
of  Government  shall  adopt  such  measures  as  shall  prevent  any  inter- 
ference by  a  foreign  power  with  the  course  of  the  development  of  our 
domestic  or  foreign  commerce. 

THE  LEGALITY  OP  THE  ARRANGEMENTS  UNDER  WHICH  THE  PRIVI- 
LEGES OF  THE  TRANSIT  TRADE  HAVE  BEEN  EXTENDED  TO  THE 
PACIFIC  OCEAN. 

The  legality  of  the  arrangement  whereby  the  privileges  of  the  do- 
mestic transit  trade  have  been  secured  bj^  the  Canadian  Pacific  Rail- 
way Company  is  subject  to  serious  doubt.  Such  privileges  have  beea 
secured  by  forming  a  connection  with  an  American  steamer  line  plying 
between  Vancouver  and  ports  in  the  United  States  as  far  south  as  San 
Diego,  Cal.  The  abrogation  of  Article  XXX  of  the  treaty  of  Washington 
denied  this  privilege  to  foreign  vessels.  The  connection  made  by  the 
Canadian  Pacific  with  an  American  steamer  line  is,  however,  question- 
able as  to  its  legality.  Our  navigation  laws  confine  the  domestic  car- 
rying trade  exclusively  to  American  vessels.  Obviously  an  American  ^ 
vessel  can  not  take  a  cargo  of  domestic  goods  from  San  Francisco  ta 
Valparaiso,  Chili,  and  there  ship  them  by  a  foreign  vessel  to  New 
York,  but  American  vessels  are  carrying  goods  from  San  Francisco  to- 
Vancouver,  British  Columbia,  there  to  be  shipped  to  New  York  by  the 
Canadian  Pacific  and  its  Eastern  railroad  connections,  under  condition* 
much  less  favorable  to  the  protection  of  our  revenues  from  customs  than 
in  the  former  case.    It  will  be  easy  for  the  committee  to  procure  in^ 

I   formation  from  the  law  oflBcers  of  the  Government  upon  this  subject,. 

I   and  I,  therefore,  leave  the  matter  with  the  simple  expression   of  my 

I   views  in  regard  to  it. 

f      There  is,  however,  a  feature  of  the  foreign  transit  trade  through 

f  Victoria  which  appears  to  be  openly  and  flagrantly  in  violation  of  the 
letter  and  spirit  of  the  law.  Our  existing  laws  concerning  the  trans- 
portation of  dutiable  goods  from  seaports  of  the  United  States  to  inte- 
rior points  in  the  United  States,  say,  for  example,  imported  goods  from 
San  Francisco  to  Chicago,  require  that  a  consular  invoice  of  such  goods 
shall  be  delivered  to  the  customs  officer  at  San  Francisco  for  examina- 
tion ;  that  entry  of  the  goods  shall  be  made  at  that  port  j  that  the 
goods  shall  be  shipped  under  a  transportation  bond  for  the  security  of 
the  duties ;  that  the  railroads  over  which  the  transportation  takes  place  - 
shall  also  be  bonded,  and  that  the  cars  in  which  they  are  carried  shall  be* 


^ 


I 


,■.-.(. *^--.-«    J         •>         s*..  '\  y  ■     ^     •       ^  -       ■     -  ■  •y--    ,  ''  '    'j         :  K 


N 


662  TRANSPORTATION    INTERESTS    OF 

sealed.  But  at  the  present  time  foreign  goods  to  be  shipped  east  to  points 
in  the  United  States  are  received  by  an  inspector  of  customs  of  the  dis- 
trict of  Puget  Sound,  who,  as  I  am  informed,  has  been  made  a  consular 
agent  of  the  United  States.  He  simply  certifies  to  manifests  of  Amer- 
ican  goods,  and  forwards  them  without  examining  or  certifying  to  the 
invoices,  and  the  Canadian  Pacific  being  a  foreign  corporation  can  not 
execute  a  bond  to  the  United  States  for  the  faithful  performance  of  any 
service  whatever.    The  whole  proceeding  appears  to  be  unwarranted. 

So,  without  any  authority  of  law  and  by  a  manifest  abrogation  of  law, 
Vancouver  is  exempted  from  important  requirements  which  apply  at  San 
Francisco.  Thus  the  administrative  branch  of  our  own  Government  is 
actually  aiding  the  great  politico-military  railroad  of  Canada  in  its 
work  of  deflecting  commerce  from  American  ships,  from  American  sea- 
ports, and  from  American  transportation  lines  by  the  sheer  force  of 
Canadian  and  British  subsidy. 

I  hesitate  not  to  characterize  this  as  disgraceful  to  the  Government 
of  the  United  States  and  a  matter  which  calls  for  immediate  rectifica- 
tion, 

THE  STEITGGLE  MADE  BY  THE  CANADIAN  PACIPIC  RAILWAY  COMPANY 
FOR  THE  CONTROL  OF  AN  IMPORTANT  PART  OF  THE  INTERNAL  AND 
FOREIGN  COMMERCE  OF  THE  UNITED  STATES. 

The  Canadian  Pacific  Railway  was  open  for  traffic  in  the  month  of 
June,  1886.  With  a  phenomenal  audacity  the  Dominion  Government 
and  the  Canadian  Pacific  Railway  management  assumed  that  the  priv- 
ileges of  both  the  internal  and  the  foreign  transit  trade  of  the  United 
States  applied  to  transcontinental  traffic,  notwithstanding  the  historic 
fact  that  the  entire  transit  trade  was  originally  established  under  the 
peculiar  conditions  of  interjecting  territory  on  the  Eastern  side  of  the 
continent,  and  by  virtue  of  the  fact  that  the  Canadian  Provinces  of 
Ontario  and  Quebec  were  shut  off  from  foreign  commerce  by  ice  and 
fogs  during  six  months  of  the  year.  The  act  of  July  28,  1866,  made  the 
extension  of  the  "transit  trade"  subject  to  the  discretion  lodged  with 
the  Secretary  of  the  Treasury  touching  the  protection  of  tlie  revenues 
from  customs,  and  the  twenty-ninth  article  of  the  treaty  of  Washington 
in  terms  granted  the  privileges  of  the  transit  trade  in  favor  of  the  par- 
ticular routes  on  the  East  side  of  the  continent  described  in  that  article, 
and  to  such  other  routes  as  might  be  "specially  designated  by  the  Presi- 
dent of  the  United  States." 

I  think  that  from  the  stand-point  of  national  interest  and  honor  it  is 
a  cause  for  regret  that  the  late  administration  should  have  uncondi- 
tionallj'  extended  the  privileges  of  the  transit  trade  to  transcontinental 
traffic  and  thus  have  aided  the  government  of  Canada  in  carrying  out 
-a  line  of  policy  the  objects  of  which  are  inimical  to  the  commercial, 
navigation,  and  transportation  interests  of  this  country  and  in  a  polit- 
ical sense  offensive  to  the  United  States.  As  our  navigation  laws  for- 
bid that  any  foreign  vessel  shall  engage  in  our  domestic  commerce,  it 
was  necessary  that  an  American  line  of  steamers  should  form  the  con- 
nection with  the  Canadian  Pacific  Railway,  whereby  that  agency  of  the 
Dominion  Government  might  be  able  to  compete  with  the  transconti- 
nental and  eastern  trunk  lines  of  the  United  States  for  the  traffic  of  Cali- 
fornia, Oregon,  and  Washington  with  the  east  side  of  the  continent. 
Under  the  arrangement  which  was  made  for  carrying  that  object  into 
effect  the  Canadian  Pacific  Railway  at  once  began  a  bull-dozing  j)olicy  in 
regard  to  rates  with  the  object  plainly  in  view  of  wresting  trom  the 


.  •** 


THfc    UNITED    STATES    AND   CANADA.  663 

American  lines  alarge  share  of  the  through  traffic.  They  wanted  a  larger 
share  than  the  American  lines  could  afford  to  grant  without  imperiling 
their  own  interests.  Besides  it  was  seen  that  a  very  material  reduction 
of  through  rates,  in  order  to  prevent  traffic  diversion,  would  compromise 
the  American  lines  with  respect  to  an  equitable  adjustment  of  through 
and  local  rates  and  generally  with  respect  to  competing  and  non-com- 
peting rates.  This,  however,  would  inevitably  have  led  to  popular 
discontent  all  along  their  lines  and  the  blame  would  of  course  have 
fallen  immediately  upon  the  managers  of  the  American  lines.  The 
general  manager  of  one  of  these  lines  remarked  that  with  them  it  was 
a  question  of  "no  traffic  or  no  rates." 

Everything  seemed  to  favor  Canadian  aggression.  The  Treasury  De- 
partment had  given  the  whole  case  away  and  soon  after  the  interstate- 
commerce  act  took  effect.  For  months  the  managers  of  the  American 
transcontinental  railroads  were  in  a  demoralized  state,  while  Mr.  Col- 
lingwood  Schreiber,  chief  engineer  and  manager  of  the  government 
railways  of  Canada,  exultingly  reported  to  his  government,  under  date 
of  December  26,  i887,  that  "  already  notes  of  alarm  have  been  sounded 
by  the  American  press  at  the  manner  in  which  the  Canadian  Pacific 
Railway  is  cutting  into  the  business  of  the  transcontinental  roads  of 
the  United  States."  The  Canadian  Pacific  Railway,  constructed  mainly 
by  the  gifts  and  aids  of  various  sorts  extended  by  the  Canadian  gov- 
ernment and  backed  up  by  that  government  in  every  act  of  aggression 
upon  American  interests,  was  fighting  a  set  of  American  lines  con- 
structed mainly  oi*  entirely  by  private  capital  with  large  financial  obli- 
gations and  confronted  by  a  jealous  and  somewhat  unfriendly  public 
sentiment  in  this  country  toward  the  railroads  generally.  The  situation 
seemed  to  illustrate  the  irony  of  fate. 

After  a  while  the  Interstate  Commerce  Commission  decided  that  the 
competition  of  the  Canadian  Pacific  Railroad  is  a  cause  for  departure 
from  the  "  long  and  short  haul  rule."  This  was  a  great  relief  to  the 
transcontinental  railroads,  but  a  greater  relief  to  the  producing  indus- 
tries of  California,  which  depend  for  quick  markets  u[)on  that  portion 
of  the  United  States  situated  east  of  the  Missouri  River.  To  what  ex- 
tent the  long  and  short  haul  rule  may  be  departed  from«the  Commis- 
sion has  cautiously  refrained  from  saying,  and  the  country  is  still  at 
sea  upon  the  vitally  important  question  as  to  the  influence  which  shall 
be  exerted  in  the  determination  of  relative  rates  by  rival  commercial 
forces,  by  mountain  ranges  and  arid  wastes,  and  by  the  competition  of 
water  lines,  and  by  the  power  exerted  by  the  Dominion  Government 
through  its  alter  ego,  the  Canadian  Pacific  Railway  Company.  This  is 
the  emergent  question  of  our  railroad  problem,  which  must  finally  be 
settled  bv  judicial  determination.  For  many  mouths  a  war  of  rates 
continued  between  the  Canadian  Pacific  and  the  American  lines,  and 
the  situation  to  day  is  in  the  nature  of  an  armistice.  The  plan  adopted 
for  keeping  the  peace  is  that  of  differential  rates.  By  this  concession 
the  Canadian  Pacific  is  allowed  to  charge  lower  rates  in  order  to  secure 
a  share  of  the  through  traffic,  a  virtual  concession  to  the  financial 
power  of  the  Dominion  Government  behind  the  Canadian  Pacific. 

This  is  illustrated  by  the  following  table  showing  the  rates  which 
now  prevail  on  through  traffic  from  San  Francisco  to  Chicago  by  direct 
American  routes  and  by  the  Canadian  Pacific  route  by  steamer  to  Van- 
couver, and  thence  by  Canadian  Pac^c  Railway  and  its  eastern  couv   '^ 
nections. 


».    ;i-  ■      -      .  »  _....--■■■:.  •-  .i  .    / 


^JT^*- 


664 


TRANSPORTATION   INTERESTS   OF 
Through  rate$  from  San  Franciaco  to  Chicago. 


llerolumdiae  oIam. 


Fint .. 

Second 

Third. 

Fourth 

Fifth., 


Direct 

Americkn 

route. 


$3.iM 
3.40 
2.70 
2.10 
1.85 


Canadian 
Pacific 
roQte. 


$3,724 
3.26i 
2.58 
&00 
1.75 


Differ- 
ential. 


$0.17* 

•1*4 
.12 
.10 
.10 


Merchandise  oUm. 


▲ 

B 
C 
D 
E 


Direct 

American 

roate. 


$1.90 
1.70 
1.35 
1.20 
1.10 


Canadian 
Pacific 
route. 


$1.82 
1.02 
1.28 
L15 
1.06 


Differ- 
entiid. 


10.08 
.08 
.07 
.06 
.05 


The  discrimination  in  passenger  traflBc  is  illustrated  by  the  following 
statement  quoted  from  printed  schedule  showing  the  rates  in  force  on 
the  26th  of  December,  1889. 

Bates  from  St.  Paid,  Minn.,  to  Portland,  Oregon. 


Class. 

• 

Via 

Northern 

Pacific. 

Via 

Canadian 

Pacific. 

Limited- 
First  class 

$60 
35 

$50 

Second  class  •.•••••.•••••••...•...••••••«•••••••••••••••. ••••...•... 

30 

1 

During  the  year  1888  the  Canadian  Pacific  in  its  fight  with  the  Amer- 
ican transcontinental  lines  secured  about  39  per  cent,  of  the  traffic 
between  San  Francisco  and  a  line  of  which  the  principal  eastern  points 
are  St.  Paul,  Milwaukee,  Chicago,  St.  Louis,  and  New  Orleans.  I 
have  not  been  able  to  procure  any  later  information  as  to  the  relative 
magnitude  of  this  movement. 

The  Interstate  Commerce  Commission,  in  their  recently  published 
report,  say: 

It  is  estimatoid  that  fally  oue-third  of  the  through  business  of  the  Canadian  Paoiiio 
to  and  from  the  Pacific  coast  consists  of  traffic  furnished  from  the  United  States. 

TRAFFIC    BETWEEN  THE    ATLANTIC    SEA-BOABD    STATES  AND  CHINA 
AND  JAPAN  OVEE  THE  CANADIAN  PACIFIC    ROUTE. 


There  is  a  traffic  over  which  neither  the  Transcontinental  Eailway 
Association  or  any  other  American  railway  organization  appears  to  ex- 
ercise any  sort  of  control.  I  refer  to  the  direct  traffic  between  points 
in  the  Atlantic  Sea-board  States  and  China  and  Japan,  over  the  Cana- 
dian Pacific  Eailway  and  its  heavily  subsidized  ocean  steamer  line. 
This  commerce  is  being  deflected  from  American  steamer  lines  on  the 
Pacific  Ocean,  from  American  sea-ports  on  the  Pacific  coast,  and  from 
American  railroads  across  the  entire  continent,  by  the  sheer  force  of 
subventions  granted  by  the  Dominion  and  British  Governments. 
Through  rates  are  quoted  between  Atlantic  and  Pacific  coast  cities, 
but  there  is  no  supervision  over  such  traffic  such  as  that  which  is  exer- 
cised by  the  Transcontinental  Association  over  traffic  west  of  Chicago 
and  St.  Louis. 

The  following  tables  exhibit  respectively  the  kinds  and  weights  of 
commodities  exported  from  the  Atlantic  Sea-board  States  to  China  and 


'>f>,"»,'V. 


>V»  \''i'-«.'«9 


r  t 


THE  UNITED  STATES  AND  CANADA. 


665 


JapaD  via  British  Columbia  by  the  Canadian  Paci6c  Railway  and  its 
heavily  subsidized  British  steamer  line  across  the  Pacific  Ocean  : 


No.  59. — Statement  shoicing  Ihe  kinds  and  weights  of  commodities,  the  production  of  the 
United  Slates,  exported  Jrom  the  United  States  throuflh  Britixh  Columbia,  via  the  Cana- 
dian Pacific  Railway,  to  China  and  Japan  during  the  year  ending  June  30,  16S8. 

[From  official  reports  by  the  United  States  inspector  of  customs  at  Vancouver,  British  Columbia.] 


Articles. 


Books 

Boots  and  shoes,  India-mbber 

Clocks  and  watches 

Cottons 

Gypsom 

Hoofs,  horns,  and  bones 

Lubricants 

Machinery 

Merchanuise 

Organs 


Weight 


Foundt. 

5,073 

910 

&07 

4, 660, 168 

27,410 

72,606 

7,896 

678,047 

81,102 

21, 103 


Articles. 


Personal  effects 

Plumbago 

Rattan  core 

Talc 

Tobacco  and  cigarettes 

Tram-cars 

Type-writers 

ToUl 


Weight. 


Pounds. 

15, 571 

300 

305 

2,080 

1,725 

45,000 

60 

53,653 

5, 625, 355 


No.  60. — Statement  shotting  the  kinds  and  weights  of  commodities,  the  production  of  the 
United  States,  exported  from  the  United  States  through  British  Columbia,  via  the 
Canadian  Pacific  Railway,  to  China  and  Japan  during  the  year  ending  June  30,  ldc9. 

[From  official  report  by  the  United  States  inspector  of  customs  at  Vancouver,  British  Columbia.] 


Articles. 


Air-gnns 

Apples 

Books,  stationery,  charts,  and  printed 

matter 

Boots,  India-rubber..... 

Carbons 

Cartridges,  m etallic 

Cases  of  wood ... 

Celluloid 

Clav  pipe 

Collars,  linen , 

Copper  wire 

Cottons      

Cream  of  tartar 

Cresin , 

Dry  goods,  not  specified 

Drugs,  not  specified 

Electric  fixtures 

Fire-works 

Gas-fixtures 

Ginseng 

Glassware 

Headl-ights  for  locomotives 

Hoofs  and  fertilizers 

Iron  and  steel : 

Castings 

Fire-arms.... 

Hardware 

Locomotive  springs 

Machinery,  not  specified 

Printing-presses 

Scales 

Type-writers 

Wire  rope 


Weight. 


Pounds. 
40 
310 


40,588 

4,097 

4.140 

3,162 

300 

1,255 

2.861 

534 

10,  070 

,  756.  504 

821 

564 

11, 401 

8,080 

106,451 

1.400 

2,110 

39,933 

lOO 

450 

182,780 

9,762 

361 

12,411 

470 

328,938 

1,819 

3,663 

200 

20,040 

Articles. 


Lamps.... 

Leather,  belting 

Mica 

Milk,  condensed 

Mercliandise,  not  specified 

Missionary  goods 

Musical  instruments: 

Organs 

Pianos 

Oils,  lubricating 

Oils  and  paints 

Paper 

Pencils,  of  lead 

Personal  effects 

Phonographs  

Photographic  goods 

Pictures 

Sulphur. 

Silk,  raw 

Skates,  roller 

Tea 

Telegraphic  wire 

Tobacco 

Cigarettes 

Tinware 

Varnish 

Wood  manufactures: 

Boats 

One  show-case 

Wax-candle  &tock ».. 

Total 


Weight. 


Pounds. 

410 

1,713 

65 

1,896 

5,466 

70,460 

2,720 

1,050 

18, 016 

1,150 

100 

880 

12, 085 

2,100 

714 

110 

274 

2,602 

37,700 

480 

3,420 

753 

3,792 

1,531 

1,754 

2,340 

(*) 

7,788 

12, 834, 901 

•  2fo  weight  given. 


i  .'.>*;• 


-t  ■     I  ■  -    ,      ;  - 


\  .  -  1  ;    ■    .f  • 


666 


TRANSPORTATION    INTERESTS   OP 


No.  61. — Statement  ahoiring  the  kindB  and  weights  of  commodities  ivijwrted  into  the  United 
States  through  British  Columbia,  via  the  Canattian  Vacifiv  Hail  way,  from  China  and 
Japan  during  the  calendar  year  i8ti6,  and  the  eleven  months  ending  November  30,  18dl). 

[From  official  reports  of  the  United  States  inspector  of  cnatoms  at  Vancouver,  British  Columbia.] 


Commodities. 


Tea 

nice 

BawsUk 

Curios 

Mftttinz 

Straw  braid 

Flax  fiber  

Paper  ware 

Silk  waste 

Fire-worlts 

Silk  goods 

Japan  ware 

Personal  effects 


1888. 


Pound$. 

14, 687,  627 

216,385 

560,591 

140, 374 

4,030 


180 


Eleven 

months  of 

1889. 


Ponndt. 

8, 600,  550 

3,461,382 

790, 791 

361, 277 

305, 912 

100,555 

83,370 

37,  610 

27,920 

16,777 

10,391 

7,387 

7,350 


Commodities. 


Bamboo 

Silk  tloss 

Porcelain 

Animal  skins 

Art  Koods 

Groceries 

Lily  bulbs 

Ivories 

Merchandise  (not  other- 
wise described) 


Total. 


1888. 


Pounds. 


10,400 


167,040 

19,250 

180 

1, 065, 370 


Eleven 

months  of 

1889. 


Pounds. 

6,420 

3,902 

748 

530 

160 


644.411 


16,877,427      14,467,533 


Theasurt  Dspartmkmt,  Bubrau  of  Statistics, 

December  27,  1889. 


8.  6.  Brock. 
Chi^fcif  Bureau. 


The  quantity  of  tea  imported  by  this  route  during  the  year  ended 
June  30,  1889,  constituted  20  per  cent,  of  the  total  imports  of  tea 
into  the  United  States  during  that  year. 

The  precise  question  which  confronts  Congress  and  the  country  is : 
Shall  a  foreign  railroad,  built  by  a  foreign  government,  and  a  subsidized 
British  steamer  line,  established  in  connection  with  that  railroad  for 
commercial  and  political  purposes  inimical  to  the  United  States,  be  per- 
mitted to  divert  American  commerce  from  American  vessels,  American 
sea-ports  and  American  transportation  lines,  and  if  not,  what  measures 
shall  be  adopted  for  the  i)rotectiou  of  these  American  interests  ? 

CANADIAN  DISCRIMINATIONS  IN  THE  MATTER  OP  ENTRANCE  AND 

CLEARANCE  FEES. 

Almost  all  the  commercial  nations  on  the  globe.  Great  Uritain  in- 
cluded, now  allow  American  vessels  to  enter  their  ports  from  all  foreign 
ports  upon  the  same  terms,  as  to  duties  of  tonnage  or  i  jort,  as  are 
levied  upon  their  own  vessels  entering  from  foreign  ports.  In  other 
words,  no  nation  discriminates  against  the  vessels  of  another  in  the  mat- 
ter of  duties  of  tonnage  or  impost.  This  arrangement  of  maritime  re- 
ciprocity in  its  general  application  is  not  based  upon  treaty  stipula- 
tions, but  upon  reciprocal  statutory  provisions  of  a  general  or  special 
nature.  Such  legislation  was,  I  think,  initiated  by  the  United  States 
in  our  act  of  May  24,  1828.  But  notwithstanding  the  fact  that  this 
reciprocal  arrangement  now  characterizes  the  maritime  intercourse  of 
the  civilized  globe,  and  the  fact  that  Canadian  vessels  are  allowed  to 
enter  at  ports  of  the  United  States  upon  the  same  terms  as  to  tonnage 
duty  and  entrance  and  clearance  fees  as  are  charged  American  vessels, 
Canada  charges  American  vessels  arriving  from  American  ports  an 
entrance  fee  of  50  cents  and  a  clearance  fee  of  50  cents,  making  $1 
for  every  visit  to  a  Canadian  port,  whereas  no  entrance  or  clearance  fee 
whatever  is  imposed  upon  Canadian  vessels  having  a  license  issued  by 
the  Canadian  authorities,  and  the  Commissioner  of  Navigation  of  the 
United  States  informs  me  that  '*it  is  presumed  that  the  license  is  ob- 
tained by  such  vessels,  practically,  in  every  case."  . 


; %  »   -.  .  •-  '  .T ' 


THE    UNITED    STATES    AND    CANADA. 


GG't 


This,  in  dollars  and  cents,  is  comparativelj'  a  small  matter  to  the  ', 
country  at  larjje,  but  it  serves  to  illustrate  the  general  fact  that  all 
along  the  line,  from  the  banks  of  Newfoundland  to  the  island  of  Van- 
couver, this  aggressive  Canadian  Government  leaves  no  chance  of  en- 
croachment upon  American  commerce  and  no  loop-hole  of  advantage 
for  Canadian  vessels  or  Canadian  trade  which  it  does  not  improve  by 
an  unfair  discrimination  of  some  sort  in  favor  of  Canadian  interests. 

In  passing  I  would  observe  that  the  United  States  does  not  allow 
Canadian  vessels  to  engage  in  trade  Iwjtween  American  ports,  and  that 
Canada  does  not  allow  American  vessels  to  engage  in  trade  between 
Canadian  ports.  This  is  and  always  has  been  the  case.  Each  country 
absolutely  protects  its  own  coastwise  or  domestic  carrying  trade 
against  foreign  competition. 


CANADIAN  VIOLATIONS  OP  THE  TERMS  OF  THE  TREATY  OF  WASHING- 
TON AND  OF  THE  OBLIGATIONS  OF  THE  TRANSIT  TRADE. 

A  flagrant  and  most  absurd  violation  of  a  treaty  stipulation  between 
the  United  States  and  Great  Britain  was  brought  to  the  attention  of 
the  House  of  Kepresentatives  on  the  4th  of  January,  1888,  in  the  form 
of  a  resolution  submitted  by  the  Hon.  Nelson  Dingley,  jr.,  ofMaine. 
During  the  three  preceding  j-ears,  through  the  device  of  an  '*  order  in 
council,'^  a  rebate  of  18  cents  per  ton  had  been  allowed  out  of  the  total 
toll  of  20  cents  per  ton  on  grain  of  all  sorts  passing  through  the  Wel- 
land  and  St.  Lawrence  Canals,  if  shipped  to  Montreal.  This  constitutes 
a  premium  of  18  cents  a  ton  offered  by  the  Canadian  Government  in 
favor  of  the  diversion  of  American  commerce  from  American  seaports 
and  American  transportation  lines.  An  officer  of  the  revenue  depart- 
ment of  Canada  has  innocently  confessed  that  *^the  object  of  the  Do- 
minion Government  in  promulgating  this  order  was  to  encourage  trade 
over  the  St.  Lawrence  route  instead  of  allowing  it  to  go  to  American 
ports." 

On  the  16th  of  Jjinuary,  1888,  Mr.  Dingley  showed  that  this  discrimina- 
tion was  clearly  in  violation  of  Art.  XXV^II  of  the  treaty  of  Washing- 
ton. It  also  constitutes  a  most  flagrant  and  manifest  violation  of  the 
reciprocal  relations  under  which  the  '*  transit  trade"  exists.  The  life 
of  that  arrangement  subsists  in  an  entire  abstinence  from  any  sort  of 
discrimination  in  favor  of  the  cars,  the  vessels,  or  the  ports  of  either 
country.  When  the  two  countries  shall  attempt  to  vie  with  each  other 
by  discriminations  in  favor  of  their  ow  i  cars,  or  vessels,  or  ports,  the 
whole  transit  trade,  with  all  its  conditions  of  mutual  benefit,  will  be 
wiped  out.         * 

It  was  hoped  that  the  Dominion  Government  would  have  recognized 
the  expediency,  if  not  the  justice,  of  receding  from  this  manifest  breach  of 
treaty  obligation ;  but  this  has  not  been  done.  On  the  20th  of  April,  1888, 
the  offensive  discriminating  order  was  renewed.  The  Dominion  Govern- 
ment seemed  to  be  alarmed,  and  delayed  the  order  about  a  month,  un- 
til the  absorbing  issues  of  our  approaching  Presidential  campaign  had 
oalled  the  attention  of  Congress  and  the  country  away  from  Canada. 
But  again,  on  the  18th  of  March,  1889,  the  discriminating  order  was 
issued  by  an  order  of  council  for  the  season  of  navigation  of  1889. 
Last  year  there  was  no  awakened  public  sentiment  to  be  feared  in  this 
country,  and  the  order  was  issued  at  an  unusually  early  date. 

It  is  observed  that  this  violation  of  the  provisions  of  the  treaty  of 
W^ashington,  and  of  the  conditions  under  which  the  transit  trade  ex- 
ists, is  not  committed  through  an  act  of  Parliament,  but  by  the  sly  and 


668  TRANSPORTATION   INTERESTS   OP 

facile  expedient  of  an  annnal  "order  in  council,''  a  method  of  wrong- 
dolDg  for  which  Charles  I,  King  of  England,  was  adjudged  a  tyrant^ 
and  for  which  he  at  once  lost  his  crown  and  head. 

In  responding  to  this  indefensible  discrimination  against  American 
commerce,  the  Government  of  the  United  States  ought  at  once  to  im- 
pose a  tonnage  of  at  least  10  cents  per  ton  on  the  gross  tonnage  of  all 
Canadian  vessels  passing  through  the  canal  at  Sault  Ste.  Marie,  the 
rapids  in  the  strait  which  connects  the  navigation  of  Lake  Superior 
with  that  of  Lake  Huron.  This  canal,  with  its  locks  515  feet  long  and 
80  feet  wide,  was  constructed  at  a  cost  of  about  $4,000,000,  and  is  now 
owned  and  operated  by  the  Government  of  the  United  States.  Both 
American  and  Canadian  vessels  are  allowed  to  pass  through  Sault  Ste. 
Marie  Canal  free  of  tolls.  That  the  United  States  has  full  power  to 
order  such  discriminating  tax  upon  Canadian  vessels  will  be  readily 
seen  by  examining  Article  XXVII  of  the  treaty  oi  Washington,  con- 
cluded July  4, 1871.  At  that  time  the  canal  belonged  to  the  State  of 
Michigan,  and  it  was  not  transferred  to  the  United  States  until  June 
5, 1881. 

There  are  also  other  appropriate  and  effective  means  of  retaliation 
upon  Canada  for  this  unjust  discrimination  against  American  interests, 
which  will  readily  suggest  themselves  to  the  legislative  mind. 

THE  CANADIAN  REFUSAL  TO  RECIPROCATE  IN  THE  MATTER  OF  Aip- 

ING  VESSELS  IN  DISTRESS. 

On  the  4th  of  February,  1888,  the  late  Hon.  Newton  W.  Nutting,  of 
New  York,  brought  to  the  attention  of  the  House  of  Kepresentativea 
the  fact  that  the  Dominion  Government  refuses  to  accept  the  offer 
made  by  the  United  States  by  act  of  June  19,  1878,  to  allow  Canadian 
wrecking  vessels  and  machinery  to  assist  Canadian  vessels  wrecked 
in  American  waters,  provided  a  like  privilege  is  extended  to  American 
wrecking  vessels  and  machinery  in  Canadian  waters. 

This  matter  has  time  and  again  been  brought  to  the  attention  of  the 
Dominion  Government,  and  the  subject  has  several  times  been  discussed 
in  Parliament.  But  the  political  influence  of  two  or  three  Canadian 
wrecking  companies  has  been  strong  enough  to  prevent  the  Dominion 
Government  from  accepting  the  terms  of  our  proffered  reciprocity^ 
although  the  refusal  has  already  resulted  in  Isss  of  life.  But  this  re- 
fusal to  reciprocate,  in  a  cause  which  appeals  to  the  humane  impulses 
of  mankind,  is  perfectly  in  keeping  with  the  refusal  of  the  Canadian 
Government  to  allow  American  fishing  vessels  the  common  privilege  of 
seeking  refuge  in  her  ports  in  time  of  storm,  and  for  replenishment 
and  necessary  repairs. 

AN  ATTEMPTED  VIOLATION  OF  THE  RECIPROCAL  CHARACTER  OF  THE 

TRANSIT   TRADE. 

The  grasping  and  unfriendly  disposition  of  the  Canadian  Govern- 
ment toward  the  United  States  was  strikingly  illustrated  by  the 
attempted  refusal  of  the  Canadian  authorities  to  allow  grain  produced 
in  the  province  of  Manitoba  to  be  shipped  "in  bond"  from  one  point  in 
Canada  to  another  point  in  Canada  over  American  railroads.  This  took 
place  upon  the  completion  of  the  Canadian  Pacific,  early  in  the  year 
1886.  The  movement  of  several  million  bushels  of  grain  was  thus  for 
a  time  restrained.  This  was  a  flagrant  violation  of  the  privileges  of 
the  "transit  trade,"  under  which  reciprocal  arrangement  the  railroads 


i^ST^^^^-r  ■'/■''-  i^t  ■j'\.-'}\  :  ,f  :';••*•-■'- v'^-.-J^^^Vi'T-' 


THE  UNITED  STATES  AND  CANADA.  669 

of  Canada  have  profited  ten  times  as  mach  as  the  railroads  of  the 
United  States.  The  ^'transit  trade"  has  also  been  of  enormous  advan- 
tage to  the  commercial  and  industrial  interests  of  Canada.  The  refusal 
of  the  Dominion  Government  to  allow  grain  to  be  transported  **in  bond" 
over  American  railroads  was  not  openly  announced,  but  it  was  carried 
on  surreptitiously. 

The  Ottawa  authorities  declared  that  no  instructions  had  been  issued 
to  the  officials  in  Manitoba  to  prevent  the  traffic,  and  the  customs  offi- 
cials in  Manitoba  declared  that  no  instructions  had  been  issued  to  them 
whereby  they  could  issue  the  necessary  certificates  allowing  the  move- 
ment  of  g^in  from  one  point  in  Canada  to  another  point  in  Canada  over 
an  American  line.  The  treaty  of  Washington,  concluded  May  8,  1871, 
bore  the  first  marks  of  this  scheme  of  refusing  to  be  bound  by  the  re- 
ciprocal conditions  of  the  transit  trade.  The  words  **  to  other  places  in 
the  United  States,"  near  the  end  of  the  second  paragraph  of  article  29, 
grant  to  Canadian  railroads  the  right  to  convey  goods  from  one  point 
in  the  United  States  to  another  point  in  the  United  States  without  pay- 
ment of  duty,  whereas  there  are  no  corresponding  words  in  the  first  para- 
graph of  the  article  referred  to,  which  grant  a  reciprocal  privilege  to  the 
railroads  of  this  country.  The  Canadian  Pacific  seemed  to  be  trying 
the  experiment  of  taking  advantage  of  this  omission,  which  was  either 
the  result  of  a  blunder  or  of  a  fraud.  But  the  gathering  storm  of  indig- 
nation convinced  the  Canadians  that  the  whole  transit  trade  might  be 
endangered  by  their  refusal  to  observe  the  obligations  of  its  reciprocal 
character  and  they  prudently  withdrew  their  covert  opposition. 

I  have  presented  this  case  merely  as  a  further  illustration  of  the  char- 
acter of  the  Dominion  Government  and  to  show  that  the  people  of 
Canada  carry  no  friendship  into  their  trade  with  the  United  States. 

ACTION  OF  THE  COMMERCIAL  AND  INDUSTRIAL  BODIES  OF  THE 
PACIFIC  COAST  IN  REGARD  TO  CANADIAN  PACIFIC  RAILWAY  EN- 
CROACHMENT. 

The  people  of  the  Pacific  coast  at  last  appear  to  be  awake  to  the 
dangers  of  Pacific  Eailway  encroachment.  A  resolution  was  unani- 
mously adopted  by  the  Chamber  of  Commerce  of  San  Francisco,  on  the 
23d  of  July  last,  inviting  commercial  and  industrial  bodies  of  the 
Pacific  coast  to  meet  in  conference  at  San  Francisco  for  the  purpose  of 
considering  various  subjects  of  interest,  but  particularly  the  assault 
made  upon  the  maritime,  commercial,  and  transportation  interests  of 
that  section  of  the  country  through  the  enormous  subventions  granted 
by  the  Canadian  Government  to  the  Pacific  Eailway,  and  the  subsidies 
granted  by  the  Canadian  and  British  Governmentis  to  ocean  steam 
lines,  which  are  threatening  the  entire  destruction  of  American  steam 
navigation  on  the  Pacific  Ocean,  and  the  diversion  of  trade  from  Pacific 
Coast  ports. 

That  conference  was  held  at  San  Francisco  on  the  29th  and  30th  of 
July  last.  Referring  to  the  whole  scheme  of  British  and  Canadian 
subvention  the  report  of  the  conference  says :  "  With  such  special  ad- 
vantages the  Canadian  Pacific  can  afford  to  quote  rates  which  must 
drive  the  American  lines  out  of  the  China  trade,  and  iufiict  an  almost 
irreparable  injury  upon  San  Francisco.''   :  >,, 

The  commercial  disaster  which  thfe  merchants  and  other  business  men 
of  the  Pacific  coast  so  clearly  see  to  be  impending,  and  ?. gainst  which 
they  ask  the  Government  of  the  United  States  to  protect  them,  is  not, 
as  before  remarked,  the  result  of  a  struggle  between  private  enterprise 


^'. 


670  TRANSPORTATION   INTERESTS   OF^  /  *, 

in  the  two  countries,  but  is  the  outcome  of  a  struggle  between  private 
enterprise  in  the  United  States  as  against  a  Canadian  railroad  corpora- 
tion which  has  received  aid  from  the  Dominion  Government  in  excess 
of  its  cost,  and  which  has  been  appropriately  styled  "  the  Dominion 
Government  on  wheels."  It  is  also  the  outcome  of  a  struggle  on  the 
sea  between  private  enterprise  and  British  steamer  lines  so  lightly  pro- 
tected by  subsidy  as  to  take  the  contest  out  of  the  arena  of  competition. 

The  commercial  and  political  schemes  of  Canada  and  Great  Britain 
are  re-enforced  by  the  formidable  fortress  and  naval  station  erected  by 
the  governments  of  those  countries  at  Esquimault  on  the  island  of  Van- 
couver. Certain  of  the  chief  officers  of  the  Canadian  Pacific  have  de- 
clared that  these  works  are  merely  intended  to  serve  as  defenses  against 
a  possible  naval  attack  by  Eussia.  This  is  manifestly  absurd,  ami  is  so 
regarded  by  military  men.  Russia  sold  Alaska  to  the  United  States  to 
avoid  the  risk  of  having  it  captured  by  Great  Britain  in  the  event  of 
war,  and  to  avoid  warfare  with  Great  Britain  in  that  part  of  the  world. 
The  only  object  of  the  Esquimault  works  is  to  hold  the  commercial  van- 
tage of  this  protected  and  aggressive  transportation  line  across  !North 
America,  and  connecting  Liverpool  with  China  and  Japan. 

In  an  editorial  notice  of  the  assembling  of  the  commercial  conference 
at  San  Francisco  the  Evening  Bulletin  of  that  city  stated  the  merits 
of  the  whole  case  in  a  single  paragraph:  "Briefly  stated,  all  the  ques- 
tions (to  be  considered)  may  be  resolved  in  this  one.  What  power  is  to 
have  the  commercial  supremacy  on  that  part  of  the  Pacific  Ocean  bor- 
dering the  western  side  of  North  America?" 

This  summarizes  the  whole  case  which  now  demands  consideration  bv 
the  Fifty-first  Congress  of  the  United  States, 

I  need  say  nothing  further  in  regard  to  the  San  Francisco  conference, 
as  copies  of  its  proceedings  were  sent  to  each  Senator  and  Representa- 
tive from  the  Pacific  coast,  with  the  request  that  they  would  use  every 
consistent  endeavor  to  place  the  subject  properly  before  Congress. 

CONCLUSION. 

And  now,  in  conclusion,  I  beg  leave  briefly  to  recapitulate  the  main 
facts  which  I  have  brought  to  your  notice,  and  the  points  which  I  have 
attempted  to  establish. 

The  most  important  feature  of  our  Canadian  relationship  appears  to 
consist  in  the  fact  that  the  Dominion  Government  is  quite  as  much  an 
active  owner  and  manager  of  the  traflic  interests  of  canals  and  rail- 
roads as  a  government.  Besides,  it  controls,  for  political  purposes,  a 
railroad  across  the  continent.  For  the  creation  of  this  aggressive  sys- 
tem of  transportation  the  people  of  Canada  have  submitted  to  a  burden 
of  debt,  as  great  as  that  assumed  by  the  people  of  the  United  States 
for  the  preservation  of  our  union.  This  Canadian  governmental  sys- 
tem of  transportation  encroaches  upon  the  commercial  interests  of  the 
United  States  apparently  from  the  very  necessities  of  its  being. 

Besides  this,  1  have  brought  to  your  attention  numerous  violations 
of  treaties  and  encroachments  upon  the  commercial  interests  of  the 
United  States.  The  British  Government  has  no  power  whatever  tore- 
dress  these  wrongs.  The  Cana<lians  refuse  to  allow  that  Government 
any  sort  of  interference  in  their  internal  affairs.  Canada  has  no  army 
or  navy,  and  while  paying  no  tribute  to  Great  Britain,  imposes  duties 
on  British  goods  for  the  protection  of  Canadian  industries,  but  at  the 
same  time  looks  to  Great  Britain  for  military  protection  and  uses  her 


THE   UNITED    STATES   AND    CANADA. 


671 


lor  the  purpose  of  negotiating  treaties,  the  obligation  of  which  the  Do- 
minion Government  is  unable  or  unwilling  to  observe. 

All  along  the  line  from  Nova  Scotia  to  British  Columbia  the  United 
States  has  an  hundred  times  more  power  to  restrain  Canadian  encroach- 
ment upon  American  interests  than  can  possibly  be  exercised  by  Great 
Britain  in  any  peaceful  way. 

Do  n^t  all  these  facts  and  considerations  clearly  prove  the  folly  of  any 
further  attempt  to  cure  the  evils  connected  with  our  Canadian  relation- 
ship by  treaty  ? 

Appropriate  legislation  by  Congress,  prompted  not  by  any  hostile  or 
even  vengeful  feelings,  will,  I  believe,  be  found  sufficient  for  the  cure 
of  all  the  evils  of  which  we  now  justly  complain. 


; 


